Initiative is part of wider plan to maximize food production as war in Ukraine threatens to tighten global food supply
Prime Minister Justin Trudeau’s government will accelerate cash advances to farmers this spring to help cover rising planting costs – part of a broader plan to maximize production as war in Ukraine threatens to tighten the global food supply.
The upcoming growing season matters a lot, as Canadian consumers face the fastest food inflation in 13 years, in part because poor harvests last year reduced the supply of many staples. On top of that, Russia’s invasion of Ukraine has destabilized one of the world’s most important breadbaskets, driving up energy and fertilizer prices and raising fears about food security in countries that depend on the Black Sea region for corn, sunflower oil and wheat.
Lobbyists say Canadian farmers face a “double whammy” this spring, with soaring input costs and dwindling crop supplies. Farmers often depend on selling what is left of the previous crop in the spring to generate cash for planting, but after the extreme drought of 2021 reduced crop yields on the Prairies, there is no more left -thing in stock. “The cash was not there to fund this year’s seeding operation,” said Todd Lewis, a farmer from Gray, Sask., who is vice-president of the Canadian Federation of Agriculture.
With all this in the background, the Minister of Agriculture, Marie-Claude Bibeau, announced on April 6 temporary changes to the federal Advance Payment Programgiving farmers the opportunity to access more finance more quickly.
“It’s a matter of food security,” Bibeau said in an interview. “We want our farmers to have the ability to buy the inputs they need to have good production this year.”
The program provides cash advances of up to $1 million, based on the expected value of a farmer’s production. The first $100.00 is interest free. Farmers previously received 60% of the funding and the remaining 40% in the summer after seeding was confirmed. But the government will now allow farmers to receive 100% immediately.
“It’s the first step, because it’s under my authority. So that’s a quick fix that we can provide,” Bibeau said, adding that she will explore ways to provide further assistance. “But that would require additional permissions. So we still have work to do. We want to see what the real needs are.
The move comes two days after Ottawa announced changes to the Temporary Foreign Worker Program this will make it easier for farms, food processors and other labour-strapped employers to bring in workers from overseas. Farm Credit Canada, the Crown corporation that lends to farmers, has also offered credit limit increases of 30% for farm input financing.
Last week, Trudeau’s Ukraine War Incident Response Group looked for ways to “relieve current pressures on supply chains in the medium to long term,” including through increased food production and treatment, according to a reading from the April 1 meeting.
“There will be additional demand for food in general, and Canada is able to produce a lot,” Bibeau said. “We just have to hope for a good season.”
Canada will not be able to contribute much now, since the majority of its crops are sown in the spring and will not be available until the fall. There are no “grain or land reserves that can be put into use immediately”, the The Canadian Agri-Food Policy Institute (CAPI) said in a report late last month. Ukraine’s key crops are corn and sunflower and Canada “certainly cannot be considered a major exporter of corn” and is not a major exporter of sunflower products.
But in the longer term, Canada could contribute to what the CAPI describes as a coordinated multinational effort “to provide continued relief in the supply of wheat and other animal feed to countries most sensitive to the loss of Ukraine as a supplier”.
“Canada will not solve the problems of the Ukraine crisis,” the CAPI report said. “However, there are some steps Canada can take. »
Canada will not solve the problems of the Ukrainian crisis
CAPI report
One such action is to stop relying on Russia for nitrogen fertilizers. Fertilizer Canada, a lobby group that represents fertilizer makers and retailers, told the National Post last month that costs have roughly doubled in the past year. A fertilizer costs for grain growers have increased at around $130 to $140 per acre this year, up from $60 to $65 in 2021, according to Fertilizer Canada estimates.
“It is remarkable that with its reserves of natural gas, Canada finds itself in a position of importing Russian fertilizers,” CAPI said, adding that in a more geopolitically unstable world, “fertilizers are emerging as products of base of high strategic value”.
Bibeau said she is always in favor of adding value to Canadian natural resources, but that ultimately comes down to private companies. “These are business decisions at the end of the day,” she said.
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